Categories:
Free Markets
Liberty
The Economic Freedom of the World: 2023 Report came out this week. The Fraser Institute in Vancouver, Canada publishes a new report each year. The data are for 2021.
In this report, the United States is rated #5. The top rated jurisdiction last year, Hong Kong, switched places with Singapore this year.
Big picture: Economic freedom of the world is the same as in the previous year (2020) and hadn’t been that low in over a decade.
I’ll have more to say in the next few days about some of the very interesting results you find when you dig into the report.
One such result: Where do low-income people (the poor) get a slightly higher percent of income: in a country with lots of economic freedom or in a country with little economic freedom?
READER COMMENTS
Thomas L Hutcheson
Sep 23 2023 at 2:23pm
Considering the reports of the Chinse restrictions on movement that I thought applied in HK, too, this is a surprising result. And ironic that the CCP would be running the most free economy. Too bad they don’t try the same at home.
David Henderson
Sep 23 2023 at 3:11pm
Thanks for that comment, Thomas. I’ll dig into HK more when I look at all the elements of the ranking. As you know, it ranks for economic freedom, not civil liberties. Still, I would have thought that the repression of civil liberties would have bled over to economic freedom by 2021.
Dylan
Sep 23 2023 at 3:28pm
As mentioned in my other comment, HK is no longer separately counted by Heritage/WSJ as of 2021. After seeing just how intertwined government is in housing in both Singapore and HK, I’ve been a bit surprised how they keep showing up at the top of the rankings. I would have figured that should be weighted more highly. But, it has been a few years since I read the details of one of the reports to see if they talk about that.
Dylan
Sep 23 2023 at 3:24pm
Any idea what the major differences are between Fraser’s methodology and the Heritage/WSJ Index of Economic Freedom? The U.S. scores much lower in those rankings and they no longer count Hong Kong as separate, but otherwise the top portion of the rankings seem roughly similar.
David Henderson
Sep 24 2023 at 4:17pm
I don’t because I haven’t paid nearly as much attention to the Heritage rankings. My vague impression is that Heritage does a less complete set of categories for measuring economic freedom.
Dylan
Sep 23 2023 at 3:31pm
Well, that was a bit disappointing. I just downloaded the full report and searched for any mention of housing and not a single mention in 282 pages.
Brandon
Sep 23 2023 at 4:08pm
As an economist, what would you rather use to gauge the general health and wealth of a society: these economic freedom indexes (Fraser, WSJ, Cato, etc.) or GDP (PPP) per capita.
Why the one or the other?
Thanks in advance!
David Henderson
Sep 24 2023 at 4:20pm
You write:
Health of a society: economic freedom index because in my view economic freedom is such a huge component of health (although I don’t mean physical health.)
Wealth of a society: GDP per capita because it tends to be highly positive correlated with wealth.
Brandon
Sep 27 2023 at 4:38pm
Thanks.
Any particular reason why you prefer GDP per capita to GDP (PPP) per capita? Or do not prefer one over the other because they’re both similar and it’s nice to have options depending on the context of a dialogue?
Thomas Hutcheson
Sep 23 2023 at 9:24pm
Probably higher economic freedom. Equality => Higher trust Society => greater economic freedom Of course he is a reverse causation, too. Economic Freedom => higher income => greater equality.
Matthias
Sep 25 2023 at 12:50am
For what it’s worth, my adopted home of Singapore seems to be a very high trust society. And got the top spot in the rankings.
Hong Kong is also fairly high trust.
Interestingly, Thailand seemed fairly high trust when I visited. At least in the sense that people don’t mind leaving knick knacks out and about, eg unattended on their scooters, confident that they will still find then when they come back.
In contrast, such petty theft is endemic in Germany and the UK, but nevertheless those two countries are much richer than Thailand.
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